• 10.09.2025 at 14.00
• Annual report, Report to Parliament

National Audit Office’s Annual Report to Parliament 2025

The NAOF’s annual report covers all audits and follow-ups of previous audits completed between September 2024 and August 2025. The annual report includes the Auditor General’s review and the most important audit findings and recommendations compiled in eight chapters.

Auditor General’s review: Central government finances must be strengthened on a long-term basis – audit information helps to build a situational picture

Central government finances have been in deficit for a long time. This is no longer an issue dependent on the business cycle but a structural problem. What is therefore needed is consistent fiscal policy extending beyond parliamentary terms. This, more than anything, would strengthen economic actors’ confidence in the future and promote our economy’s resilience, the significance of which cannot be underestimated in these times. Within the scope of its mandate, the National Audit Office of Finland (NAOF) aims to produce reliable and relevant audit and oversight information on topics significant to central government finances and the state’s financial management. We hope that this information helps to create a shared understanding of the situation.

The administrative sectors, i.e. the ministries and agencies, have been tasked with implementing substantial savings. In addition to the savings included in the Government Programme, the administrative sectors have been assigned additional savings targets in two consecutive general government fiscal plans. Examination of the audits presented in this annual report reveals a few structural factors that may, somewhat unexpectedly, make it more difficult to achieve savings.

In order to balance public finances, the Government sets savings targets for the administrative sectors, but at the same time, a significant part of the appropriations in the annual budget are carried over to the following year. According to the final central government accounts for 2023, a total of EUR 9.80 billion was carried over to 2024. Although a large part of this amount was committed to known expenditure, a substantial part remained uncommitted. In the final accounts for 2024, the amount carried over remained almost unchanged and was EUR 9.75 billion.

In fact, government agencies’ and institutions’ expenditure will not be reduced in the short term because most of them have uncommitted carry-over items available for their use. Large amounts carried over weaken the transparency of budgeting and thereby the budgetary power of Parliament.

Another key challenge relates to administrative silos. The aim has been to respond to this by means of various programmes and strategies aimed at coordinating the activities and measures of several administrative sectors. A specific form of operation is parliamentary working groups, which aim to achieve a common understanding of the issues at hand.

Cross-sectoral programme and strategy work is useful from the perspective of cooperation and pooling of resources, but from a savings perspective, it has some problematic features. Programmes are often based on the idea of addressing a given matter as broadly as possible. This starting point creates pressure to include in the programme everything possibly related to the topic even if the measures are not particularly cost-effective in terms of achieving the objective.

Including a measure in a joint programme of administrative sectors may become an additional reason for maintaining an appropriation, which makes it more difficult to achieve savings. In this case, across-the-board savings in ministries may focus on measures that fall outside the scope of joint programmes – even if they affect the core activities of the administrative sector.

When a joint programme for different administrative sectors is built, the choices made should be guided by the efficiency of appropriation use. This can sometimes mean transferring resources between different administrative sectors. This should be possible if everyone is genuinely committed to promoting the common goal.

Similar challenges also apply to other decisions that increase expenditure. Parliamentary working groups may decide even on significant additional expenditure, bypassing the budget procedure. Decisions to implement cost-cutting measures are made less frequently by them. Similarly, although there is consensus on a very significant increase in defence expenditure, no consideration has been given to how the increase will be financed or what expenditure will have to be reduced accordingly.

After all, the consolidation of central government finances should be a common goal for all. All measures taken to achieve this are welcome. This is another reason for increasing the efficiency of appropriation use now and in the future.

200 years of auditing

The past year marked the National Audit Office’s 200^th year of operation. The anniversary year proceeded at the NAOF as usual, in the course of regular work. The NAOF’s tasks and workload increased to some degree when its statutory duty to maintain the Finnish Transparency Register and oversee the disclosure of lobbying activities began at the start of 2024. In recent years, the NAOF has been assigned various new oversight duties. However, auditing central government finances remains the NAOF’s most resource-intensive task, and this report to Parliament provides an overview of the results of the audit work. As the annual report can only summarise the audit results, I encourage anyone interested in the topics to also read the actual audit reports. You can find the information on them at the end of each chapter. The NAOF publishes all audit results on its own website. Audit work and its transparency contribute to increasing public trust in the functioning of public administration. The aim is to communicate both the positive and the negative as they are.

The annual report summarises the audit results of the past year

The National Audit Office conducts annual financial audits of all central government accounting offices. This decision made by the NAOF makes it possible to obtain aggregate audit information continuously on the use of state funds. Based on long-term monitoring data, it can be said that the state of financial management has remained relatively stable. In the past couple of years, the number of cautions issued by the NAOF to accounting offices was slightly higher than before, but in the financial audits for 2024, their number returned to the previous, level. The decrease in the number of cautions is a positive thing, and I hope that the number will be even lower in the future. The results of financial audits and compliance audits are presented in Chapter 1.

The legality of the management of public finances is threatened, for example, by financial crime and other unethical conduct. Cyber threats also have a clear economic dimension. In relation to these threats, the NAOF audited preparations for the prevention of money laundering, corruption and cyber threats. The results of these audits are presented in Chapter 2.

With regard to the selection and cost-effectiveness of environmental actions, the NAOF completed audits of climate measures and water protection. The state’s contribution to climate action has increased significantly in recent years, and particular attention should therefore be paid to efficient use of funds. The results of these audits are presented in Chapter 3.

The National Audit Office also audited the effectiveness of alternative steering models used in the central government. The results of these audits are presented in Chapter 4. Line organisation and performance management form the foundation for central government steering. The ministries steer the administration, or agencies, under them by setting targets and providing resources for them, and the agencies report on the achievement of the targets. In addition to this basic model, the central government has a large number of activities where the steering is carried out differently from the line organisation. In cross-sectoral matters, joint strategies or programmes are often created to steer the activities. The Government and its Government Programme often play a key role in these. The ministries steer the state’s special-assignment companies in line with the Government’s ownership policy resolution. Appropriations are often also used as a steering instrument, for example in the case of government grants.

Chapter 5 deals with efforts to promote social inclusion. As the population is aging and younger age groups are becoming smaller, it is also important from an economic perspective that as many people as possible can have a long working career. In addition, the costs of social exclusion and care are significant and also affect central government finances. The lack of inclusion is not always a question of social exclusion in the traditional sense, but the shift of services to digital and online platforms also makes it difficult for some groups to participate in society.

The results of fiscal policy audits and their follow-ups are presented in Chapter 6. The findings of the fiscal policy monitoring function are reported to Parliament in separate reports and are therefore not discussed in this annual report.

Chapter 7 presents the processing of complaints submitted to the NAOF and the processing, content and number of reports on irregularities. The complaints have particularly highlighted concerns about the legality of procurements. The public authorities are obliged to report to the National Audit Office any financial irregularities in their activities. Most often, the reports have concerned the use of government grants. The NAOF has observed, with concern, that despite the obligation, there are differences between the authorities in how they report the irregularities they have encountered to the NAOF.

Chapter 8, the last chapter, presents the NAOF’s targets and its use of appropriations to achieve the targets. The chapter also presents the NAOF’s most important reports from the past year, and partly also from the current year, and examines the development of their number. In terms of the number of reports and the achievement of the targets, the report year was good. For this, I wish to thank the NAOF’s dedicated and committed staff.

Sami Yläoutinen
Auditor General